Molloy and Foust & Anor
[2024] FCWA 236
•17 OCTOBER 2024
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: MOLLOY and FOUST & ANOR [2024] FCWA 236
CORAM: BERRY J
HEARD: [REDACTED]
DELIVERED : 17 OCTOBER 2024
FILE NO/S: 2835 of 2016
BETWEEN: MS MOLLOY
Applicant
AND
MR FOUST
First Respondent
MR GALLO
Fourth Respondent
Catchwords:
FINANCIAL - Application by the wife seeking orders for property settlement against the husband - Application opposed by the husband - Where orders are made at the commencement of trial removing the Fifth and Sixth Respondents from the proceedings - Where the husband and the Fourth Respondent were not legally represented - Where there is one child of the marriage and the wife has a child of a previous marriage who are both adults - Where the husband became the sole registered proprietor of the former matrimonial home prior to the commencement of cohabitation - Where the wife and the child moved out of the former matrimonial home upon separation - Where the husband sold the former matrimonial home in contravention of Court orders made in 2016 and another property registered in his name to the Fourth Respondent in contravention of Court orders made in 2019 - Where the husband was found guilty of contempt of Court and imprisoned for a period of 18 months - Where the husband did not seek to purge his contempt while serving his sentence - Where the marital parties executed a Deed of Settlement and Release arising out of a further contempt application filed by the wife in October 2020 - Where the husband denies having any remnant of the sale proceeds of the former matrimonial home in his possession or control and asserts that he used the funds to pay off debts that he incurred while gambling with an underground syndicate in 2019 - Where the Court is satisfied that the husband retains at least a portion of the funds and treats the balance as a premature distribution of property in favour of the husband - Where the Court is satisfied that the Deed entered into by the husband and the Fourth Respondent in relation to the sale of the other property is a sham - Where the Court is satisfied that each marital party made equal contributions and it is just and equitable to make orders dividing their notional and actual asset pool equally - Orders made - Case turns on its own facts
Legislation:
Family Law Act 1975 (Cth)
Town Planning and Development Act 1928 (WA)
Category: Reportable
Representation:
Counsel:
| Applicant | : | Mr R Bannerman |
| First Respondent | : | Self Represented Litigant |
| Fourth Respondent | : | Self Represented Litigant |
Solicitors:
| Applicant | : | Bannerman Solicitors |
| First Respondent | : | Self Represented Litigant |
| Fourth Respondent | : | Self Represented Litigant |
Case(s) referred to in decision(s):
Alexander v Manly (2004) 29 WAR 194
Barnell & Barnell (2020) FLC 93-961
Benson & Drury (2020) FLC 93-998
Boulton & Boulton [2024] FedCFamC1A 132
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Briginshaw v Briginshaw (1938) 60 CLR 336
Candle & Falkner (2021) FLC 94-069
Chorn and Hopkins (2004) FLC 93-204
Fox v Percy (2003) 214 CLR 118
Hurst v Weber (2009) 233 FLR 337
Lovine & Connor and Anor (2012) FLC 93-515
Molloy and Foust [2020] FCWAM 66
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR
449
Norbis v Norbis (1986) 161 CLR 513
Robb and Robb (1995) FLC 92-555
Rodgers & Rodgers (No 2) (2016) FLC 93-712
Russell v Russell (1999) FLC 92-877
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449
Stanford v Stanford (2012) 247 CLR 108
Townsend and Townsend (1995) FLC 92-569
Trevi & Trevi (2018) FLC 93-858
Vass v Vass (2015) 53 Fam LR 373
Weir and Weir (1993) FLC 92-338
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES' NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Molloy and Foust & Anor has been approved by the Family Court of Western Australia pursuant to s 114Q(2) of the Family Law Act 1975 (Cth).
This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
BERRY J:
Introduction
1 The Applicant wife, [Ms Molloy] (''the wife''), commenced these proceedings in May 2016, seeking orders for property settlement against her former husband, the First Respondent, [Mr Foust] (''the husband'').
2 Over the following eight years, a further six respondents were joined to the proceedings. By the time that this trial date was allocated in February 2024, only three respondents in addition to the husband remained as parties to the proceedings. At the commencement of trial, orders were made including for the removal of the Fifth and Sixth Respondents, leaving only the Fourth Respondent, [Mr Gallo], and the husband as the remaining two respondents in the proceedings. The trial was conducted on the basis that the former Sixth Respondent gave evidence as a witness called by the wife.
3 The husband and Mr Gallo were not legally represented. The Court is satisfied that the trial was conducted in a manner which was procedurally fair to both of them.
Evidence relied upon
4 The wife relied upon her primary trial affidavit filed on 10 April 2018, together with her updating trial affidavits filed on 5 May 2020, 17 March 2023 and 18 January 2024. The wife also relied upon her financial statement filed on 18 January 2024.[1] The wife did not file an undertaking as to disclosure.
[1] Papers for the Judicial Officer filed by the Applicant wife on 16 September 2024 (''Wife's Papers for the Judicial Officer''), electronic page 26 of 38; a typographical error refers to the wife's primary trial affidavit being filed on 14 April 2018.
5 The wife called [Mr Davies], the former Sixth Respondent in the proceedings, and relied upon his affidavits filed on 3 May 2021 and 27 August 2021.
6 The husband relied upon his primary trial affidavit filed on 10 August 2018, together with his updating trial affidavit filed on 22 May 2023. The husband also relied upon financial statement filed on 22 May 2023. The husband filed an undertaking as to disclosure on 22 May 2023 to which was attached a schedule of disclosed documents.
7 Mr Gallo relied upon his trial affidavit filed on 30 May 2023.
8 The Court received a number of exhibits into evidence.
Background
9 The wife was born [in] December 1971 and the husband was born [in] January 1966 (''the marital parties''). The marital parties started a relationship in 2003, commenced cohabitation in October 2004, were married on 24 April 2005, and separated on a final basis on or around 16 April 2016. They were divorced on 24 August 2017.
10 The only child of the marriage, [Child A] (''the child''), turned 18 years of age in April this year. The wife has one child of a previous marriage, [Mr B], who lived with the marital parties during the relationship and is now over 18 years of age.
11 The husband became the sole registered proprietor of [the Suburb A property], [Suburb A] on 15 September 2005. A copy of the Certificate of Title obtained on 4 October 2018 revealed that the only encumbrances were two restrictive covenants, and a notification pursuant to the Town Planning and Development Act 1928.[2] The Suburb A property was ultimately owned by [the Foust Family Trust], an entity under the control of the husband.
[2] First Updating Trial Affidavit of the Applicant wife affirmed on 4 May 2020 (''Wife's First Updating Trial Affidavit''), Annexure ''A'' (Copy of Certificate of Title dated 4 October 2018), electronic page 17 of 27.
12 From separation until the date that the husband disposed of the property, the husband lived in the former matrimonial home situated at [the Suburb B property], [Suburb B] ("the former matrimonial home"), which was registered in his sole name on 13 May 1997.[3] The wife and the Child A moved out of the former matrimonial home when the marital parties separated.
[3] Trial Affidavit of the Applicant wife affirmed on 10 April 2018 (''Wife's Trial Affidavit''), [57].
13 The husband conducted a [Trade BB] business during the relationship. The wife worked at [Beauty Service Provider Z]. The former Second Respondent, [Mr C], and the former Third Respondent, [Mr D], are the husband's brothers, and the wife was granted leave to discontinue the proceedings against them on 22 March 2023.[4]
[4] See the Orders made on 22 March 2023.
14 On 3 August 2004, the husband (as grantor) signed an option agreement with his brothers (as grantee) (''the Option Agreement''). The Option Agreement was stamped on 20 September 2004, very shortly before the husband and wife commenced cohabitation. The salient terms of the Option Agreement are as follows:[5]
1.The grantee requests the grantor to grant an option to purchase the former matrimonial home (and any other real estate that the grantee owns from time to time).
2.For $5.00 paid by the grantee to the grantor, the grantor grants to the grantee an option to purchase the real estate (and any chattels associated with the real estate) [from the grantee] for $5.00.
3.The grantor acknowledges receiving the $5.00 [from the grantee].
4.The grantee may exercise the option by written notice.
5.If the option is exercised, then the amount paid for the option is credited against the purchase price.
[5] Wife's Trial Affidavit, Annexure ''A'' (''Copy of the Option Agreement''), electronic pages 37 to 48 of 76.
15 The husband included reference to the Option Agreement in his financial statement sworn 2 September 2016.[6]
[6] Exhibit 6, ''Form 13 Financial Statement of the First Respondent sworn on 2 September 2016'' (''Exhibit 6''), Part O, electronic page 12 of 12.
16 The wife commenced proceedings on 18 May 2016.
17On 24 May 2016, the Court made an order restraining the husband from alienating, encumbering or otherwise disposing of the former matrimonial home.
18 At the time that the wife filed her trial affidavit on 10 April 2018, she alleged that the asset pool was worth at least $1,266,178. According to the wife, the principal asset was the former matrimonial home. Also, the wife alleged that the Foust Family Trust, controlled by the husband, owned the Suburb A property. The wife also asserted that the husband had an interest in [the Foust Superannuation Fund] worth $120,000. [7]
[7] Wife's Trial Affidavit, [263].
19 In giving this evidence, the wife maintained that her knowledge of the asset pool was incomplete, due to inadequate disclosure from the husband.[8] Throughout the proceeding, the wife has complained about the husband's deficient disclosure and alleged disregard of the Court's orders.
[8] Ibid [264].
20 On 28 May 2019, the Court made orders to the following effect:
(a)restraining the husband from disposing of the Suburb A property, until he has provided full and frank disclosure in relation to his dealings with the real estate agent appointed by him, and authorised the wife and her solicitors to communicate with the real estate agent and obtain all necessary information in relation to the sale; and
(b)upon settlement of the sale of the Suburb A property, the net proceeds of sale must be paid into a joint interest‑bearing account in the marital parties' joint names and requiring both parties' signatures to make any transactions.
21 On 8 March 2020, the husband entered into a contract for the sale of the former matrimonial home, in contravention of the Orders made on 24 May 2016, in circumstances later found by the Court to constitute a flagrant challenge to its authority, before the former matrimonial home was subsequently transferred to an unrelated third party in accordance with the contract, for $770,000.[9]
[9] Second Updating Trial Affidavit of the Applicant wife affirmed on 16 March 2023 (''Wife's Second Updating Trial Affidavit''), [75] and Annexure ''K'' (Contract for Sale of Land by Offer and Acceptance), electronic pages 75 to 77 of 108.
22 Notwithstanding the Orders made on 28 May 2019, the husband transferred the Suburb A property to Mr Gallo for a dutiable value of $140,000 on 30 April 2020.[10]
[10] Ibid Annexure ''A'' (''Documents obtained from the Settlement Agent''), electronic pages 27 to 34 of 108.
23 The husband and Mr Gallo signed a Deed dated 30 April 2020.[11]
[11] Ibid electronic page 28 of 108.
24 The sole operative term of the Deed states:[12]
THAT IN CONSIDERATION of the value of the property [the Suburb A property] [Mr Foust] hereby transfers to [Mr Gallo] the land described in the Schedule [the Suburb A property], and the parties HEREBY RELEASE each other from further payment in relation to the loan.
(As per original)
[12] Ibid electronic page 27 of 108.
25 The recital to the Deed states:[13]
In consideration of [Mr Foust] transferring the land described in the Schedule [the Suburb A property] to [Mr Gallo], who is entitled to receive the sum of one hundred and forty thousand dollars ($140,000.00) from [Mr Foust], the transfer of the property [the Suburb A property] shall be full and final payment for the loan between them.
(As per original)
[13] Ibid.
26 The signatures of the husband and Mr Gallo on the Deed were witnessed by [Mr E], solicitor.[14]
[14] Ibid electronic page 28 of 108.
27 The transfer of land in respect of the Suburb A property was signed by the husband and Mr Gallo on 30 April 2020 and registered by [Settlement Agent M] on 4 May 2020. The transfer records a consideration of $140,000. The signatures of the husband and Mr Gallo were witnessed by [Ms F], a conveyancer.[15]
[15] Ibid electronic pages 29 to 34 of 108.
28 In a letter to Landgate dated 4 May 2020, Mr E, in his capacity as a solicitor, identifies both the husband and Mr Gallo as his clients.[16]
[16] Ibid Annexure ''D'' (''Documents obtained from the Settlement Agent''), electronic pages 50 to 51 of 108.
29 On 1 May 2020, the Court ordered the husband to immediately deposit the sale proceeds from the former matrimonial home into the trust account of the wife's solicitors. The husband failed to do so, in contravention of the Orders made on 1 May 2020, in circumstances later found by the Court to constitute a flagrant challenge to its authority.
30 On 8 June 2020, the wife filed a Form 19 Contempt Application in respect of the husband's alleged flagrant breaches of Court Orders made on 24 May 2016 and 1 May 2020, in respect of his disposal of the former matrimonial home.
31 The husband swore an affidavit on 6 July 2020, prepared by Counsel, "to explain my [the husband's] admissions that I [he] was in contempt of Court" [in respect of breaching the Orders made on 24 May 2016 and 1 May 2020].[17]
[17] Affidavit of the First Respondent husband sworn on 6 July 2020, [2].
32 Following the husband's trial for contempt of Court on 10 July 2020, the husband was found guilty, on his own admission, of two charges of contempt of Court. The contempts were contraventions of the Orders made on 24 May 2016 and 1 May 2020, in the circumstances already described. On 17 July 2020, the Court delivered reasons and made orders sentencing the husband to a term of imprisonment for a period of 18 months.[18] The husband served the term of imprisonment and did not at any time during his prison term seek to purge his contempt by disgorging any part of the net proceeds of sale of the former matrimonial home.
[18] Molloy and Foust [2020] FCWAM 66.
33 The husband retained and, on his evidence, disposed of the net proceeds of sale of the former matrimonial home in the sum of $625,727.65. The learned Family Law Magistrate did not accept the husband's evidence about his alleged disposal of the net proceeds of sale of the former matrimonial home.[19]
[19] Ibid [1] and [34] to [36].
34 Following separate enquiry from the wife's solicitors in relation to the husband's disposal of the Suburb A property on 30 April 2020, Ms F, in her capacity as a director and conveyancer of Settlement Agent M, responded by email on 25 July 2020 and stated:[20]
[Mr Foust] came in to our office and organised the settlement and the agreement. Then a few days later both [Mr Foust] and [Mr Gallo] came in and signed everything.
(As per original)
[20] Wife's Second Updating Trial Affidavit, Annexure ''B'' (''Correspondence from the Settlement Agent''), electronic page 35 of 108.
35 On 10 September 2020, the wife filed a Form 2 Application and an amended Form 1 Application, seeking orders to set aside the transfer of land in respect of the Suburb A property dated 30 April 2020 and the Deed entered into between Mr Gallo and the husband dated 30 April 2020. The wife also applied for an order that the husband and Mr Gallo be restrained by injunction from alienating, encumbering or otherwise disposing of the Suburb A property.
36 The wife sought an order that the Suburb A property stand charged in her favour to secure her entitlement pursuant to property settlement and other relief pursuant to the Family Law Act 1975 (''the Act''), and/or the performance by the husband of all or any obligations to comply with the provisions of any orders made in the course of the proceedings, including procedural orders.
37 On 19 October 2020, the Court made orders dispensing with the requirement for the wife to personally serve her amended Form 1 Application and Form 2 Application upon Mr Gallo, on condition that such documents were served on [Mr G] of [Real Estate Agent N] in [Suburb C], together with a letter requesting that the documents be brought to the attention of Mr Gallo as soon as possible.
38 On 9 November 2020, the husband and Mr Gallo were ordered to each file and serve a response and affidavit in respect of the wife's Form 2 Application, within 28 days. The proceedings were adjourned for further hearing on 11 December 2020 at 11:00am, with respect to the wife's Form 2 Application.
39 On 10 December 2020, the day prior to the hearing of the wife's application, Mr Gallo transferred the Suburb A property to the Fifth Respondent for $125,000. The contract in respect of the transfer was dated 8 December 2020.[21]
[21] Ibid [31] and Annexure ''F'' (''Landgate Transfer and the Certificate of Title''), electronic pages 54 to 57 of 108; the undated first page of the contract appears annexed to the trial affidavit of the Fourth Respondent sworn on 27 May 2023 at Annexure ''JU-8'', electronic page 38 of 38.
40 According to an extract from the records of the Australian Securities and Investments Commission, relied upon by the wife, the former Fifth Respondent was a superannuation trustee company registered in 2011, and the former Sixth Respondent has been the sole director and secretary from the company's inception.[22]
[22] Wife's Second Updating Trial Affidavit, Annexure ''G'' (''ASIC Search''), electronic pages 58 to 66 of 108.
41 On 11 December 2020, the Court made orders including the following orders:
4.The Applicant, [Ms Molloy], have leave to join [Mr Gallo] to the proceedings to be defined as the Fourth Respondent.
5.Until further order of the Court, the First Respondent and the Fourth Respondent be restrained and an injunction is hereby granted restraining them from allenating (sic) [alienating], encumbering or otherwise disposing of the [Suburb A] property.
6.The [Suburb A] property stand charged in favour of the Applicant to secure her entitlement to property settlement pursuant to section 79 of the Family Law Act 1975 (Cth).
[…]
8.The Applicant be at liberty and do all things and sign all documents necessary to permit her to lodge and maintain an absolute Caveat secured over the Title to the [Suburb A] property.
(As per original)
42 The matter was next listed for directions only on 25 February 2021. On 10 February 2021, the wife filed an amended Form 1 Application seeking the following additional proposed final orders:
13.The Wife have leave to join [Superannuation Trustee Company O] and [Mr Davies] to the proceedings to be defined as the Fifth and Sixth Respondent.
14.Pursuant to Section 106B of the Family Law Act 1975, the Transfer of Land entered into between [Mr Gallo] and [Superannuation Trustee Company O] and [Mr Davies] concerning the property situated at [the Suburb A property] in the State of Western Australia and the Deed entered into or other contract relating to the transfer.
(As per original)
43 The Court infers that the incomplete statement of the orders sought by the wife in paragraph 14 should end with the words "be set aside". Such an inference is compelling, given the terms of the Form 2 Application and affidavit also filed by the wife on 10 February 2021. The wife never amended her application to seek this order.
44 The Court granted ex parte orders in respect of the Form 2 Application on 12 February 2021, including orders which provided that:
(a)the Fifth and Sixth Respondents be joined as parties to the proceedings;
(b)the Fifth and Sixth Respondents were restrained by injunctions from alienating, encumbering, or otherwise disposing of the Suburb A property;
(c)the Suburb A property stand charged in favour of the wife to ensure the wife's entitlement to property settlement pursuant to Section 79 of the Act and relief pursuant to the Act and/or the performance by the husband of all and any obligations to comply with the provisions of any orders made in the course of these proceedings, including any procedural orders; and
(d)the wife be at liberty to do all things and sign all documents necessary to permit her to lodge and maintain an absolute Caveat secured over the title to the Suburb A property.
45 The wife filed an Undertaking as to Damages on 12 February 2021.
46 The Court also ordered that the proceedings remain suppressed on the Commonwealth Courts Portal until close of Registry on 15 February 2021. By subsequent orders, the period of suppression was extended until 19 February 2021.[23]
[23] See the Orders made on 17 February 2021.
47 On 18 February 2021, the husband was ordered to pay the wife costs fixed in the sum of $33,488.84.
48 On 25 February 2021, Mr Gallo and the former Fifth and Sixth Respondents were ordered to file and serve, within 28 days, a Form 1A Response and affidavit in support if they sought orders in the proceedings.
49 On 24 March 2021, the former Fifth Respondent and former Sixth Respondent were directed and ordered, and the order was deemed sufficient authority and an irrevocable authority to direct [Settlement Agent P] in respect of the Suburb A property, to deposit the proceeds of sale into a trust account of the wife's solicitors.
50 The order further provided that Settlement Agent P were required to release to the wife's solicitors any information or copies of any documents that were requested in relation to the sale of the Suburb A property. Further, the former Fifth Respondent and former Sixth Respondent were restrained by injunction from dealing with the proceeds of sale of the Suburb A property in any manner inconsistent with the orders.
51 The former Fifth Respondent and former Sixth Respondent were granted liberty to relist the matter on reasonable notice.
52 On 4 August 2021, the Court ordered the Sixth Respondent to file and serve an affidavit of evidence on his own behalf, and on behalf of the Fifth Respondent, by 30 August 2021. The Sixth Respondent filed an affidavit as ordered on 27 August 2021.
53 On behalf of the Fifth Respondent, the Sixth Respondent sold the Suburb A property for $160,000, after accepting an offer on 1 February 2021.[24]
[24] Affidavit of [Mr Davies] affirmed on 27 August 2021, Annexure ''A'' (''[Real Estate Agent Q] Settlement Analysis Sheet''), electronic page 9 of 21.
54 On 4 March 2021, the husband pleaded guilty to the five counts of contempt in relation to the husband's disposal of the Suburb A property to Mr Gallo. On 20 July 2021, the husband made an offer to the wife to purge the five counts of contempt. On 21 July 2021, the wife accepted the husband's offer. The husband agreed that his brother, Mr C, the former Second Respondent, would pay the wife the sum of $100,000 within 28 days of execution of the Deed, upon receipt of which the wife would discontinue the contempt application. The wife also consented to the husband transferring a [Car Make A] motor vehicle to the former Second Respondent. The husband paid the settlement sum to the wife.[25]
[25] Wife's Second Updating Trial Affidavit, [128] and Annexure ''T'' (''Deed of Settlement and Release''), electronic pages 103 to 108 of 108.
55 On 17 August 2021, the spouses and the former Second Respondent executed a Deed of Settlement and Release. The Deed arose out of a further contempt application filed by the wife on 20 October 2020, alleging five counts of the husband breaching the Orders made on 24 May 2016, 21 March 2017 and 28 May 2019, in respect of his disposal of the Suburb A property.
56 On 22 October 2021, the following orders were made by consent:
2.By consent, the Sixth Respondent, [Mr Davies], in both his personal capacity and as director of the Fifth Respondent, [Superannuation Trustee Company O], (as trustee for the [Davies Superannuation Fund]), be restrained and an injunction is hereby granted restraining him from utilising, disposing, spending or transferring to any other party or account funds standing in the name of the Fifth Respondent or the [Davies Superannuation Fund] received from the sale of [the Suburb A property] in the State of Western Australia, save for the sum of $76,067.05 until further order of the Court or with the written consent of the Applicant, [Ms Molloy].
3.By consent, the Sixth Respondent provide a copy of the final settlement statement for the sale of the property at [the Suburb A property] in the State of Western Australia to the lawyers for the Applicant as soon as practicable.
(As per original)
57 On 11 January 2022, an Anton Piller order (made on 21 December 2021) was executed at the home of the husband's mother, where the husband lives (but was at that time still incarcerated). Pursuant to the Anton Piller order, the husband's mother was then joined as the Seventh Respondent. The course of events was substantially recorded, and those recordings are annexed to the wife's trial affidavit.[26]
[26] Wife’s Second Updating Trial Affidavit, [103] to [116] and Annexure ''Q'', (''Video Footage'').
58 Upon execution of the Anton Piller order, Mr C, then the Second Respondent, attended at his mother's home at her request and displayed extreme and unprovoked aggression, including the protracted shouting of obscenities and insults towards the wife's legal representatives, and assaulted them by pushing them out of the home.
59 Mr C obstructed and impaired the proper execution of the Anton Piller order. He took control of the process and eventually led one of the wife's lawyers and the independent observer to a safe which he opened, and from which he removed sentimental items. No cash was removed from the safe. The wife accepts that there was no cash in the safe.
Observations of the witnesses
60 The wife gave evidence and was briefly cross-examined. The wife gave her evidence in a straightforward and unremarkable manner.
61 The former Sixth Respondent, Mr Davies, gave evidence as a witness for the wife, and was briefly cross-examined. The Court accepts his evidence.
62 The husband was an unsatisfactory and unreliable witness. The Court is satisfied that the husband made no attempt to give full, frank and honest evidence to the Court. To the contrary, the Court is satisfied that the husband's evidence about not currently retaining the possession or control of any of the proceeds of sale of the former matrimonial home is untruthful. The Court is satisfied that the husband does currently retain at least $400,000 of these proceeds.
63 The Court also rejects the husband's evidence that he borrowed cash sums from Mr Gallo between 2015 and 2020. The evidence that he has given in this respect is a fabrication, a device to alienate the Suburb A property from any just and equitable settlement with the wife.
64 Mr Gallo was an unsatisfactory and unreliable witness. The Court rejects his evidence that he advanced cash sums to the husband between 2015 and 2020.
65 Contrary to the evidence of both the husband and Mr Gallo, the Court is satisfied that Mr Gallo currently holds or has already paid to the husband on dates unknown after the execution of the Deed on 30 April 2020, the sum of up to $140,000.
66 The reasons for the Court's findings in these respects are explained later in this judgment.
Orders sought by the parties
67 The wife seeks orders in terms of her Minute of Proposed Final Orders filed on 17 March 2023 and the husband seeks orders in terms of his Minute of Response to Proposed Final Orders filed on 22 May 2023.
68 A number of matters are agreed between the marital parties, to the following effect:
(a)that the husband retain particular assets and entities;
(b)that the wife retain particular assets and entities;
(c)that the wife indemnify the husband in relation to liabilities in her sole name or encumbering any item of property to which she is entitled pursuant to these orders; and
(d)that the husband indemnify the wife in relation to liabilities in his sole name or encumbering any item of property to which he is entitled pursuant to these orders, including particular liabilities as described.
69 The wife otherwise seeks orders to the following effect:
(a)against Mr Gallo, an order that he pay the wife the sum of $63,933 or alternatively the sum of $140,000;
(b)against the husband, that he transfer to the wife all assets and superannuation held in his name;
(c)against the husband, that he pay the wife the sum of $531,867 within 30 days of orders issuing being 85 percent of the sale proceeds received by the husband from the sale of the former matrimonial home; and
(d)against the husband, that he pay the wife the sum of $2,000 in costs pursuant to Orders made on 6 March 2020, and further that he pay the wife the sum of $687.50 being one half of the valuation costs undertaken by [Real Estate Appraiser R] pursuant to orders made on 8 October 2018.
70 The husband seeks that the wife's application be dismissed, to the extent the wife seeks that the husband pay her any funds by way of property settlement or costs, on the basis that he does not have the financial resources to do so.
71 Mr Gallo seeks that the wife's application against him be dismissed, on the basis that he provided bona fide consideration for the purchase of the Suburb A property in April 2020, and does not hold any cash for the husband, nor has paid any cash to the husband following Mr Gallo's disposal of the Suburb A property to Mr Davies or his company (the former Fifth and Sixth Respondents) in December 2020.
Relevant statutory provisions: Section 79 proceedings
72 The Court must identify the existing legal and equitable interests of the marital parties in the property, which each owns individually and jointly, pursuant to Section 79(1) of the Act. The parties are not entitled to assume that their respective interests in property are or should be different from those that exist at law and equity. The Court is not permitted to simply consider the statutory considerations set out in Section 79(4) and make orders altering property interests. Prior to embarking on this exercise, the Court must consider whether it is just and equitable to make any order altering property interests, pursuant to Section 79(2).[27]
[27] The propositions in this paragraph are drawn from Stanford v Stanford (2012) 247 CLR 108 (''Stanford v Stanford").
73 After satisfying itself of the matters referred to in Sections 79(1) and 79(2), the Court must consider the matters set out in Section 79(4). These matters fall into two broad categories. First, the identification and evaluation of relevant contributions to property (including property which is no longer presently owned by the marital parties or either of them), pursuant to Sections 79(4)(a) and (b), and to the welfare of the family (including as homemaker and parent), pursuant to Section 79(4)(c), from the commencement of cohabitation until trial. Second, the identification and evaluation of other adjustment factors, pursuant to Sections 79(4)(d), (e), (f) and (g).
74 While it is common for the Court to evaluate either or both of the two broad categories of considerations in Section 79(4) in percentage terms, this is not a statutory requirement.[28] Also, the Court may identify and evaluate contributions using a global or asset‑by‑asset approach, and neither approach should yield a more just and equitable outcome than the other.[29]
[28] Boulton & Boulton (2024) FLC 94-202 at [95].
[29] Norbis v Norbis (1986) 161 CLR 513 at 524, 533 to 534 and 541.
75 The Court must assess contributions holistically and have regard to the myriad disparate contributions made by the marital parties from the commencement of cohabitation until trial.[30] All contributions must be weighed collectively, and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder.[31]
[30] Barnell & Barnell (2020) FLC 93-961.
[31] Benson & Drury (2020) FLC 93-998 at 80,144 [35] and [39].
76 Relevant financial conduct or financial behaviour of the marital parties, including in respect of the use of property after separation which no longer exists, can be taken into account under Section 79(4) in a number of ways, including as a notional asset in the divisible asset pool, assessing contributions and considering other adjustment factors.[32]
[32] Lovine & Connor and Anor (2012) FLC 93-515 at 86,603 [96]; see also at 86,604 [100] to [103]; Candle & Falkner (2021) FLC 94-069 at 81,086 to 81,088 [52] to [58].
77 Lastly, the Court must revisit Section 79(2) and ensure that the form and content of any orders which it makes are just and equitable. In this respect, Section 79(2) has a dual aspect, both in determining whether it is appropriate, just and equitable to make any order at all and ensuring that any order actually made is appropriate, just and equitable, both in form and content.[33]
Property of the parties to the marriage: Section 79(1)
[33] Stanford v Stanford; Russell v Russell (1999) FLC 92-877 at 86,439 [80] (''Russell v Russell'').
78 This section of the reasons is structured under the following subheadings: (a) financial Statements of the husband and the wife; (b) drawings from mortgage redraw account and proceeds of sale of former matrimonial home; (c) disposal of the Suburb A property; (d) other findings in respect of the asset pool; and (e) conclusion in respect of the asset pool.
(a) Financial statements of the husband and the wife
79 The wife and the husband each gave evidence in their most recently sworn financial statements about the property, liabilities and financial resources currently in their respective possession, custody or control, as follows:[34]
[34] Form 13 Financial Statement of the Applicant wife affirmed on 17 January 2024 (''Wife's Form 13 Financial Statement''); Form 13 Financial Statement of the First Respondent husband sworn on 22 May 2023 (''Husband's Form 13 Financial Statement'').
Description
Wife
Husband
1.
Home with new partner (50 percent)
$287,500
-
2.
Cash at bank
Nominal
-
3.
200 shares in [Financial Institution S]
$2,178
-
4.
Motor vehicle
$24,000
-
5.
Household contents
$3,000
-
6.
Funds in the wife's lawyer's trust account
$3,128
-
7.
Superannuation interest
$19,168
-
8.
Home mortgage (50 percent)
-$287,500
-
9.
Unpaid tax due on 21 March 2024
-$747
-
10.
Personal loan from [Financial Institution T] (50 percent)
-$26,000
-
11.
Outstanding legal fees owed
-$137,199
-
12.
Cash at bank
-
$2,000
13.
Cash at bank (frozen by the Court)
-
$5,239
14.
600 shares in [Telecommunications Company U]
-
$2,574
15.
Superannuation interest
-
NIL
16.
Personal loan owed to Mr C and [Ms H]
-
-$228,307
80 The Court will make findings about the items to be excluded from the asset pool in subsection (d) below.
(b) Drawings from mortgage redraw account and proceeds of sale of former matrimonial home
81 In addition to the property, liabilities and financial resources identified in the financial statements just referred to, the wife alleges, and the Court accepts, that the husband received into a bank account in his sole name and under his sole control the net proceeds of sale from the former matrimonial home, in the sum of $625,727.65, on 14 April 2020.[35] The husband has retained the benefit of all these funds and denies having any remnant of the funds in his possession, custody or control. As earlier indicated, the Court rejects this evidence for the reasons which follow.
[35] Exhibit 2, ''Transaction statement for the First Respondent's [Financial Institution V] account ending 600111'' (''Exhibit 2''), electronic page 3 of 4.
82 Prior to receiving the net sale proceeds on 14 April 2020, the husband withdrew from the mortgage redraw account three sums of $10,000 each, on 24 March 2020, 30 March 2020 and 7 April 2020, and deposited these funds into the same account which received the proceeds of sale of the former matrimonial home, being an account in the husband's sole name and under his sole control.[36]
[36] Ibid electronic pages 3 to 4 of 4.
83 Between 25 March 2020, which was the day after the first $10,000 deposit, and 6 April 2020, the day before receiving the third deposit of $10,000 into his account from the mortgage account, the husband had withdrawn cash sums totalling $18,530.[37]
[37] Ibid.
84 On the same day that he deposited the third $10,000 payment into his bank account, the husband withdrew a further $1,000 in cash.[38]
[38] Ibid electronic page 3 of 4.
85 By the time that the husband received the net proceeds of the former matrimonial home on 14 April 2020, he had effectively withdrawn cash sums totalling $19,530, out of the $30,000 which had been transferred from the mortgage account.[39]
[39] Ibid.
86 Following the deposit of the net proceeds of the former matrimonial home on 14 April 2020, the husband dealt with the funds in the following manner:[40]
(a)[Electronic Funds Transfer Service W] or ATM withdrawals totalling $76,120 between 14 April 2020 and 8 May 2020;
(b)[Electronic Funds Transfer Service X] payment to [Jeweller Y] in the sum of $200,000 on 27 April 2020;
(c)Electronic Funds Transfer Service X payments transferred to the husband totalling $300,000, conducted by four transfers, on 20 April 2020; and
(d)withdrawal at [Suburb D] in the sum of $50,000 on 17 April 2020.
[40] Ibid electronic pages 1 to 3 of 4.
87 These withdrawals conducted under the direction and control of the husband in the brief period following the deposit of the net proceeds of sale of the former matrimonial home amounted to $626,120, which accounted for all of the net proceeds of sale.
88 In addition to these withdrawals, the husband withdrew cash sums totalling $19,530 between 25 March 2020 and 7 April 2020, derived from the three transfers of $10,000 from the mortgage account, as earlier described.
89 The husband has not produced any further documents which explain, to the Court's satisfaction, how he has dealt with or disposed of these funds, totalling $645,650.
90 In his updated trial affidavit filed on 22 May 2023, the husband fails to address or give any explanation for how he disposed of these funds, nor does he annex or otherwise rely upon any documents which show how he did so.
91 The husband provided an account for how he purportedly disposed of the proceeds of sale of the former matrimonial home in the contempt hearing on 10 July 2020, which may be summarised as follows, with interposed observations about his evidence at this trial in relation to the issue:[41]
(a)the husband commenced gambling with an underground syndicate in November 2019, resulting in him owing the syndicate more than $500,000 by January or February 2020;
(b)the husband kept a notebook or diary of repayments that he made on the debt, which he disposed of after 18 May 2020, despite being in Court on 11 and 12 May 2020, and being ordered to produce documents in relation to the sale of the former matrimonial home [the notebook or diary of repayments has never been disclosed, including at the trial in these property settlement proceedings];
(c)the husband was unable to identify a specific deadline by which the sum was required to be paid, only that it was due by the ''end of May [2020]'';
(d)the husband could not fully identify or provide contact details for any members of the underground syndicate;
(e)the husband handed over $450,000 in cash and $200,000 in diamonds, but could not identify to whom he gave the cash and diamonds, other than that they were ''debt collectors'' whom he knew only as ''[Mr I]'' and ''[Mr J]'';
(f)the husband feared for his life, including that his legs would be broken, and his children would be harmed, if the underground gambling debt was not paid, but paid his credit card balance on 30 April 2020[42] and proposed to the wife's lawyers in writing on 27 April 2020 that he would transfer 50 percent of the proceeds of sale to their trust account; and
(g)the husband claimed that the gambling syndicate involved lawyers, politicians, magistrates and judges.
[41] Exhibit 4, ''Transcript of the proceedings dated 10 July 2020'' (''Exhibit 4''), electronic pages 12 to 13, 15 to 16, 19, 21 to 23, 27, 45, 51 to 52, 59, 62, 66 to 67, 70, 72 and 76 of 95.
[42] In the sum of $4,000 by online transfer to a [Financial Institution V] credit card; see Exhibit 2 at electronic page 1 of 4.
92 The husband's evidence is inherently incredible and simply not believable, both in its content and manner of delivery. The Court rejects his evidence.
93 The Court is satisfied that the husband currently retains in his possession, custody or control a substantial proportion of the proceeds of sale, at least $400,000.[43] The Court intends to treat as a premature distribution of property in favour of the husband the sum of $245,650, comprising the balance of the capital funds earlier identified, in respect of which the husband has retained sole control and not adequately explained the disposition.[44] This add back is included in the asset pool not as representing an existing legal or equitable interest in property, but rather as a notional asset relevant to the assessment of considerations pursuant to Section 79(4) of the Act.[45]
[43] Weir and Weir (1993) FLC 92-338 at 79,593 to 79,594.
[44] Townsend and Townsend (1995) FLC 92-569 at 81,654 (''Townsend and Townsend'').
[45] Vass v Vass (2015) 53 Fam LR 373 at 394 [138] to [139].
94 The Court makes the findings in the preceding paragraph for the following reasons:
1.In the almost four and half years which have passed since his receipt of the funds, the Court accepts that the husband has dissipated some of the funds to supplement his lifestyle, including on prostitutes, as he explained in cross‑examination, as well as to supplement his income, following his decision after separation to work less in paid employment. The husband may also have elected to repay Mr C and Ms H some of the unsecured debt that he records as a liability in his financial statement. The Court finds this expenditure to be reckless, careless and negligent, and justifies the exceptional step of treating such expenditure as an add back, in the sum of $245,650.
2.The husband intends to retain these funds for the rest of his life, to the exclusion of the wife, and so will spread out his spending to supplement any personal exertions income and Commonwealth pension payments that he derives over that time. The Court is satisfied that the husband retains $400,000.
3.The husband's evidence that he dissipated $650,000 in a matter of months in 2019 and 2020 in favour of an underground gambling syndicate is rejected.
4.The failure of the Anton Piller order executed on 11 January 2022 to locate cash in a safe, the location of which was identified by Mr C, at his mother's house does not exhaust other locations where the husband may store the cash.
5.The husband is highly motivated to avoid paying the wife a just and equitable property settlement, evidenced by his decision to serve an 18 month term of imprisonment rather than purge his contempt and dispose of two properties in contempt of Court orders.
6.The husband previously executed an option agreement in August 2004, in the terms and circumstances earlier described which the Court is satisfied was simply a device intended to avoid creditors (and, taking into account the timing of its execution, possibly a future property settlement with the wife). The execution of this option agreement, unless it was intended to be treated by the husband and his brothers, as the other parties, as a sham, appeared to confer on the husband no relevant benefit or advantage.
95 In respect of the asset pool identified earlier, the Court adds items 17 and 18 as follows:
Description
Wife
Husband
17.
Funds retained by the husband from the mortgage account and sale of the former matrimonial home
-
$400,000
18.
Add back of the balance of funds from Item 17 which may have been dissipated
-
$245,650
(c) Disposal of the Suburb A property
96 The husband and Mr Gallo signed a Deed dated 30 April 2020.
97 The sole operative term of the Deed states:[46]
THAT IN CONSIDERATION of the value of the property [the Suburb A property] [Mr Foust] hereby transfers to [Mr Gallo] the land described in the Schedule [the Suburb A property], and the parties HEREBY RELEASE each other from further payment in relation to the loan.
(As per original)
[46] Wife's Second Updating Trial Affidavit, Annexure ''A'' (''Documents obtained from the Settlement Agent'') electronic pages 27 of 108.
98 The recital to the Deed states:[47]
In consideration of [Mr Foust] transferring the land described in the Schedule [the Suburb A property] to [Mr Gallo], who is entitled to receive the sum of one hundred and forty thousand dollars ($140,000.00) from [Mr Foust], the transfer of the property [the Suburb A property] shall be full and final payment for the loan between them.
(As per original)
[47] Ibid.
99 The husband transferred the Suburb A property to Mr Gallo pursuant to the Deed. Mr Gallo became the sole registered proprietor on 4 May 2020.
100 The Deed is a sham.[48] The husband entered into the Deed as a device intended to avoid paying any property settlement to the wife. The Court rejects the evidence of the husband and Mr Gallo that a loan existed between them at the time this Deed was executed. Both the husband and Mr Gallo gave inherently incredible and implausible evidence about the circumstances surrounding the purported loan history, which the Court rejects for the following reasons.
[48] Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 453 to 454.
101 The Court rejects the husband's evidence about the purported loan arrangements and history for the following reasons:
1.During the course of the husband's cross-examination, he stated that he retained a record in a notebook of the loan arrangements between himself and Mr Gallo. The notebook was not disclosed by the husband prior to trial, including in the schedule of documents annexed to his undertaking as to disclosure filed on 22 May 2023. Notwithstanding this omission, the husband stated that the notebook was placed ''in storage'' after 2020. Counsel for the wife called for the husband to produce the notebook. The husband responded that the notebook was not in Court and that he would need to recover the notebook, and he was requested to bring the notebook to Court on the following day of trial. Upon producing the notebook on the following day, which was inspected by Counsel for the wife and upon which the husband was further cross‑examined with leave of the Court, the husband sought to have the notebook tendered into evidence, after being advised by the Court of his right to do so.[49] The notebook was received into evidence.[50]
[49] Alexander v Manly (2004) 29 WAR 194.
[50] Exhibit 7, ''Notebook of the First Respondent'' (''Exhibit 7'').
2.On a page in the notebook appears the following information:[51]
[51] Ibid.
[Mr Foust's initial and surname] loan from [Mr Gallo's first name]
11/9/15 cash $10K
19/12/15 cash $7K
27/6/16 cash $12K
BALANCE $29K
9/10/16 PAID $500 interest
6/1/2017 cash $8K
22/7/2017 cash $15K
16-9-2017 paid interest $500
26/10/2019 $5K cash
14/12/2019 $7 cash [sic]
22/12/2019 $6 cash [sic]
30/4/2020 76.500
TRANSFER OF BLOCK [Suburb A]
(As per original)
The Court accepts the wife's proposition put to the husband that he sat down on the first evening of the trial and substantively copied this information into his old notebook from the schedule attached to the trial affidavit of Mr Gallo. The Court rejects the husband's evidence, when he was cross-examined for the second time, on the second day of trial, that he had this notebook in Court for the duration of the trial (by implication, when it was called for on the previous day by cross-examining Counsel) and that he had not seen Mr Gallo's trial affidavit.
3.The husband swore a financial statement on 2 September 2016, which was prepared by the husband's solicitor then acting for him, on the husband's instructions, as he acknowledged in cross‑examination.[52] At this time, according to his notebook which, consistent with the husband's evidence, was then in his possession, the husband owed Mr Gallo a total of $29,000. This debt does not appear as a liability in the husband's financial statement. But the husband does include the following liabilities in Part K of his financial statement, including some of lower value, as follows:
[52] Exhibit 6, ''Form 13 Financial Statement of the First Respondent sworn on 2 September 2016'' (''Exhibit 6'').
(a)Home mortgage: $45,000;
(b)Loan from Mr C: $4,000; and
(c)Liability to F & P [Foust] F/T: $12,000.
Total liabilities: $61,000.
The Court accepts the wife's submission that the husband would not miss out on the opportunity to claim the existence of a liability if it existed. The husband's explanation that the $29,000 debt was omitted because it was a ''private arrangement'' rang hollow, given the two other unsecured personal liabilities of lower value included in the financial statement.[53]
[53] Transcript of the cross-examination of the First Respondent husband (18 September 2024), 60 lines 20 to 25 (''Transcript, Husband, 18 September 2024'').
4.The husband never referred to the existence of the purported loan arrangement with Mr Gallo, or any outstanding loan balance, in any documents that he filed with the Court prior to 30 April 2020, including in Part K of his later financial statement sworn on 9 October 2018 and filed on 16 October 2018, at which time, according to the husband's notebook, he then owed Mr Gallo a total of $52,000.
5.The terms of the purported loan were vague, uncertain and never reduced to writing. No interest rate was fixed. Whether the interest was simple or compound was not agreed. The date of repayment was not agreed. The total sum to be advanced was not agreed. The loan was unsecured. Neither party to the purported loan countersigned a record of any advance being made or interest being paid.
6.The reasons for the loan being required by the husband were not plausible at any stage of each alleged loan advance. The husband said the loan was required, initially, to cover living expenses because the wife spent a lot of money and he needed to pay the wife's credit card. Why cash rather than a funds transfer was required to pay the wife's credit card was never adequately explained. The husband gave evidence that in April 2015, he lent $200,000 to Mr C and Ms H for investment purposes, from the mortgage line of credit.[54] Why he needed to borrow cash from Mr Gallo in September and December 2015 is unclear, particularly when he had substantial funds available in the mortgage line of credit during this period.[55]
[54] Updating Trial Affidavit of the First Respondent husband sworn on 22 May 2023, [65] (''Husband's Updating Trial Affidavit'').
[55] Exhibit 1, ''Bundle of home loan statements for the former matrimonial home'' (''Exhibit 1''); See Statements 28 and 29 contained at electronic pages 1 to 5 of 12.
7.At the time that the husband purportedly received each advance of loan funds, he was accessing and did have access to other funds under his control, as follows:
(a)the combined value of the home loan balance and the redraw balance for the mortgage facility secured over the former matrimonial home was $470,000;[56]
(b)during the period from 31 July 2015 until 2 September 2016, the home loan balance did not rise above $379,000, meaning that not less than $91,000 was available for redraw at any time during this period;[57]
(c)the closing balance for the mortgage at 2 September 2016 was $46,355.94;[58]
(d)the opening balance for the mortgage at 31 January 2020 was $96,964.37, and the loan was discharged on 14 April 2020 with a final loan repayment of $127,865.60;[59] and
(e)the increase in the mortgage debt by around $50,000 between September 2016 and January 2020 is substantially accounted for by the Orders made on 21 March 2017, which required the husband to pay the wife the sum of $12,000 in lump sum spousal maintenance, and $30,000 to the wife's solicitors by way of interim costs, by drawing down on the mortgage redraw facility.
8.The husband correctly stated that injunctions were made [on 24 May 2016, 14 October 2016 and again on 21 March 2017] restraining him from drawing down on the mortgage redraw facility secured over the former matrimonial home. Given the husband's flagrant disregard of Court orders and the Court's authority, evidenced by him pleading guilty to contempt on two separate occasions, the Court does not accept that these injunctions stopped him from accessing funds if he needed to do so. The evidence does not satisfy the Court that the husband did need to access funds by way of borrowing from Mr Gallo and did not do so.
[56] Ibid.
[57] Ibid.
[58] Ibid electronic page 12 of 12.
[59] Exhibit 3, ''[Financial Institution V] Loan Summary for the period 31 January 2020 to 15 April 2020 (page 2 of 3)'' (''Exhibit 3'').
102 The Court rejects Mr Gallo's evidence about the purported loan arrangements and history for the following reasons:
1.Mr Gallo's evidence as to when he met the husband changed during the course of his evidence. In his trial affidavit, he states that he met the husband in 2015 when he was having lunch at a pub which he cannot identify.[60] In his oral evidence, he stated that he met the husband 10 to 12 years before the pub meeting in 2015.[61]
2.Mr Gallo's evidence in his affidavit is that the husband asked him in March 2020 if Mr Gallo could give him $50,000, and then the husband would transfer the Suburb A property to him. Mr Gallo deposes that he agreed to pay the husband a further $45,000 and the husband would transfer the Suburb A property. Mr Gallo says that the husband agreed to this proposal.[62] Based on the purported notebook record of Mr Gallo, this meant that he would have advanced the husband a total of $115,000, in exchange for the transfer of the Suburb A property.[63]
3.Despite this evidence, Mr Gallo records in his purported notebook record of the loan amounts, the advance of $76,500 on 30 April 2024, not $45,000 as agreed with the husband, without further explanation in his affidavit.[64]
4.The terms of the loan were entirely uncommercial and were purportedly entered into between two individuals who were friendly acquaintances at best: Point 5 above with respect to the husband is repeated. According to Mr Gallo's note, he received two interest payments of $500 each over the first two years of the loan, from September 2015 to September 2017, when $52,000 had been advanced, and no further interest payments after that date. No request for repayment of the loan was made for the next two years, at which time Mr Gallo then advanced, at the husband's request, a further $18,000 across three payments made in October and December 2019, taking the total advances to $70,000.[65]
5.The Deed signed by the husband and Mr Gallo is inconsistent with the evidence of both of them. Mr Gallo advanced the husband $146,500, and the Deed records the loan as $140,000.[66] During his evidence and submissions, Mr Gallo explained that he was prepared to pay $146,500 for a block of land worth $140,000 because of settlement fees and other fees, and because ''it was better to do that than to lose the whole lot''.[67] In his oral submissions Mr Gallo maintained that he needed to pay the husband a further $76,500 to obtain the Suburb A property.[68] The sum of $76,500 was not consistent with the sum of $45,000 referred to in his trial affidavit.
[60] Trial Affidavit of the Fourth Respondent sworn on 27 May 2023, [3] to [5] (''Mr Gallo's Trial Affidavit'').
[61] Transcript of the cross-examination of the Fourth Respondent (18 September 2024) 98 lines 10 to 15 (''Transcript, Mr Gallo, 18 September 2024'').
[62] Mr Gallo's Trial Affidavit, [12] to [13].
[63] Ibid Annexure ''JU-1'' (''Copy of Mr Gallo's recorded notes of how much he lent and how much the First Respondent paid him''), electronic page 7 of 38.
[64] Ibid.
[65] Ibid.
[66] Wife's Second Updating Trial Affidavit, Annexure ''A'' (''Documents obtained from the Settlement Agent'') electronic pages 27 of 108.
[67] Transcript of the closing submissions of the Fourth Respondent (19 September 2024), 40 lines 10 to 25 (''Transcript, Mr Gallo, 19 September 2024'').
[68] Ibid 38 line 20 to 39 line 40.
103 The Court is satisfied that the husband transferred the Suburb A property to Mr Gallo for no consideration, contrary to the terms of the Deed. There never was a loan or advance of funds from Mr Gallo to the husband. The purported loan is a fabrication.
104 Mr Gallo later disposed of the Suburb A property to the former Fifth Respondent, being a corporate entity controlled by the former Sixth Respondent, Mr Davies, for $125,000 in December 2020. This transaction was undertaken after Mr Gallo had been joined as party to the proceedings and was subject to a pending interim application from the wife to set aside the Deed, as earlier explained.[69]
[69] See paragraphs [36] to [44] of these reasons.
105 The Court is satisfied that the former Fifth and Sixth Respondents were bona fide third parties who were unaware of the matrimonial circumstances of the husband and wife, and the context in which Mr Gallo was offloading the property.
106 Following the execution of the Deed, the Court is unable to determine whether Mr Gallo has paid the husband $140,000 or a lesser sum, given his sale of the property to Mr Davies (or his company), or how much he has already paid to the husband and how much he currently holds for the husband. But the Court is satisfied that the husband disposed of the property for a consideration of $140,000 and must account for this sum which, in the exceptional circumstances of this case, should be added back to the asset pool as a premature distribution of property to the husband.[70]
[70] Townsend and Townsend.
107 The Court is acutely aware that findings should not lightly be made, on the balance of probabilities, that a party to civil litigation has engaged in fraudulent conduct; this reflects the conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct.[71] Particular care should especially be taken where fraudulent conduct is found against a non-matrimonial party who has given evidence of the transaction being undertaken in a way that is not fraudulent.
[71] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449 at 450.
108 The Court is satisfied that a reasonable and definite conclusion can be found on the balance of probabilities in terms of the Court's findings. The Court is satisfied that the case put by the husband and Mr Gallo on this issue, as assessed by the Court, does not rise to the standard of being as equally likely to be true as the Court's findings; if their case did rise to this standard, then the Court's conclusion would be a mere conjecture or surmise.[72]
[72] Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5.
109 In particular, the Court feels an actual persuasion of these findings, which do not arise from a mere mechanical comparison of probabilities.[73]
[73] Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 to 362.
110 In conjunction with the Court's credit findings regarding the husband and Mr Gallo, the Court has taken into account the contemporary materials, objectively established facts and the apparent logic of events.[74]
[74] Fox v Percy (2003) 214 CLR 118 at 129 [31]
111 In this respect, the Court has considered the following questions:
1.Why would the husband transfer the Suburb A property for no consideration, given that the contents of the Deed would make the prospect of recovering the sum of $140,000 from Mr Gallo practically impossible?
2.Is it plausible that Mr Gallo might be prepared to lend $70,000 on an unsecured basis, but to ensure repayment then advance a further sum to the husband to receive an asset of at least similar (if not greater) value?
112 Notwithstanding that the apparently clear answers to these questions mitigates against the Court's findings, the content of the evidence earlier referred to and the presentation of the witnesses does not alter the Court's considered conclusion that the Deed is a sham. The Court is strongly satisfied that the true relationship and the real arrangements between the husband and Mr Gallo were not disclosed to the Court. The cross‑examination by each of the other, even taking into account their self-represented status, was artificial, awkward and contrived.
113 The Court's findings on this issue have been made by applying these principles.
114 However, in case the Court has erred in finding that the Deed is a sham, and that Mr Gallo has advanced the funds to the husband he deposed to advancing, the same result obtains for the purpose of identifying the matrimonial asset pool: the add back of the sum of $140,000 as a premature distribution of property to the husband is the proper outcome in any event. As will later appear, no orders will be made against Mr Gallo whether or not the Deed is found to be a sham.
115 The husband has not explained to the Court's satisfaction how he disposed of the funds that he allegedly received from Mr Gallo. Even if the Court accepted that the husband received the funds, the add back would be included in the asset pool in any event. And if the Court has erred in finding that the Deed is a sham, the husband had an extra $76,500 in cash available to him on 30 April 2020.
116 In respect of the asset pool identified earlier, the Court adds items 19 and 20 as follows:
Description
Wife
Husband
19.
Add back for disposal of the Suburb A property
-
$140,000
20.
Add back of the wife's legal costs from drawing down on the mortgage by the Orders made on 21 March 2017
$30,000
-
117 The Court is satisfied that the wife's use of funds from the mortgage redraw facility to pay her legal fees in these proceedings, after separation, should be accounted for and taken into account by way of an addback.[75] The husband paid these funds into her solicitor's trust account.[76]
(d) Other findings in respect of the asset pool
[75] Trevi & Trevi (2018) FLC 93-858 at 78,454 to 78,456 [31] to [42].
[76] Wife's Trial Affidavit, [194].
118 The Court has made findings in relation to items 17 to 20, as earlier discussed.[77] In considering items 1 to 16, earlier set out, which simply recount what each party has recorded in that party's most recently filed financial statement relied upon for trial, the Court proposes not to include items 10, 11 and 16, for the following reasons.
Item 10: Personal loan from Financial Institution T (50 percent)
[77] See paragraphs [94] to [96] of these reasons.
119 There is no evidence as to why the wife is responsible for a personal loan from Financial Institution T as to $26,000. The purpose of the loan, its reasonableness and the application of the loan funds has not been explained in evidence. The Court is not satisfied that this is liability in which the husband should share.[78]
Item 11: Outstanding legal fees owed
[78] Rodgers & Rodgers (No 2) (2016) FLC 93-712 at 81,487 to 81,491 [22] to [41] (''Rodgers & Rodgers (No 2)'').
120 The Court does not accept that the wife's outstanding legal fees of $137,199 should be included as a liability in the asset pool. The Court is not satisfied that this is a liability in which the husband should share at this stage of the proceedings.[79]
[79] Chorn and Hopkins (2004) FLC 93-204 at 79,323 [59].
121 In closing submissions, the wife's Counsel, who is also the principal of the law firm representing her, told the Court that the wife would not be required to pay any outstanding legal fees unless the Court ordered the husband to pay the wife a settlement sum, and the wife actually received the settlement sum. In that event, the quantum of the outstanding fees required to be paid would depend upon how much the wife actually received.
Item 16: Personal loan owed to Mr C and Ms I
122 The husband breaks down the alleged loan from his brother and sister‑in-law, in the total sum of $228,307.30, in the attachment to his financial statement sworn for trial, which may be summarised as follows:[80]
1.Loan for Hawaii holiday: $18,588.
2.[Law Firm A] (legal fees): $60,123.
3.[Law Firm B] (legal fees): $18,944.
4.Contempt settlement payment to wife: $100,000.
5.[Law Firm C] (legal fees): $30,652.30.
[80] Husband's Form 13 Financial Statement, electronic page 14 of 14.
123 The husband has not proved the existence of the loan, given the absence of any evidence led from Mr C or Ms I. The Court does not accept the husband's uncorroborated evidence.
124 There is also no evidence that, even if all or any of these funds were advanced, such advances are required to be repaid and whether any repayment is likely to be enforced. The terms of the loan are vague and uncertain. And the husband has retained sufficient funds from the mortgage redraw account and the sale of the former matrimonial home (and the disposal of the Suburb A property) to discharge all or part of the alleged loan, in any event.
125 Apart from all of these considerations, to the extent that this purported debt, apart from the Hawaii holiday, consists of a loan to pay legal fees and a loan for the payment of a capital sum to purge the husband's contempt (in total around $210,000), the Court would decline to include the same as a liability in which the wife should share, in any event.[81]
(e) Conclusion in respect of the asset pool
[81] Rodgers & Rodgers (No 2).
126 For these reasons, the Court finds that the asset pool of the marital parties, for the purposes of these proceedings, is as follows:
Description
Wife
Husband
1.
Home with new partner (50 percent)
$287,500
-
2.
Cash at bank
Nominal
-
3.
200 shares in Financial Institution S
$2,178
-
4.
Motor vehicle
$24,000
-
5.
Household contents
$3,000
-
6.
Funds in the wife's lawyer's trust account
$3,128
-
7.
Superannuation interest
$19,168
-
8.
Home mortgage (50 percent)
-$287,500
-
9.
Unpaid tax due on 21 March 2024
-$747
-
10.
Personal loan from Financial Institution T (50 percent)
[omitted]
-
11.
Outstanding legal fees owed
[omitted]
-
12.
Cash at bank
-
$2,000
13.
Cash at bank (frozen by the Court)
-
$5,239
14.
600 shares in Telecommunications Company U
-
$2,574
15.
Superannuation interest
-
NIL
16.
Personal loan owed to Mr C and Ms I
-
[omitted]
17.
Funds retained by the husband from the mortgage account and sale of the former matrimonial home
-
$400,000
18.
Add back of the balance of funds from Item 17 which may have been dissipated
-
$245,650
19.
Add back for disposal of the Suburb A property
-
$140,000
20.
Add back of the wife's legal costs from drawing down on the mortgage by the Orders made on 21 March 2017
$30,000
-
Total property, notional property and superannuation interests retained
$80,727
$795,463
127 The total property, notional property and superannuation interests retained by the marital parties is worth $876,190, as to the wife a total of $80,727 and as to the husband a total of $795,463. Within each former spouse's total, the wife retains notional property in the sum of $30,000, and the husband retains notional property in the sum of $385,650. Within each former spouse's total, the wife retains existing legal and equitable interests in property worth $50,727, and the husband retains existing legal and equitable interests in property worth $409,813.
Just and equitable orders - whether the Court should adjust property interests: Section 79(2)
128 The husband does not seek any relevant adjustment to the marital parties' existing legal and equitable interests in property. The husband deposes that he and the wife kept separate finances and owned nothing jointly, as that is how the wife wanted their financial affairs arranged.[82] The husband deposes that in April 2005, the wife told the husband and his brother, Mr C, that she wanted nothing to do with the husband's company and investments as she had her own affairs to look after, and because she had a bad experience in her previous marriage. Further, she did not want any of the husband's assets as they were his, and he had worked very hard for them and given her and her son a roof over their heads.[83]
[82] Husband's Updating Trial Affidavit, [77].
[83] Ibid [71] to [73].
129 This evidence was not put to the wife in cross-examination, and the Court attaches limited weight to it.
130 The wife does seek an adjustment of property interests. The wife deposes that the husband told her during the relationship that if ever they separated, she would receive nothing, and that he would make sure of this.[84] The husband's conduct before and after separation is entirely consistent with the wife's evidence in this respect, in respect of his initial reliance on the Option Agreement executed in August 2004, and is dealings with the mortgage redraw account, the proceeds of sale of the former matrimonial home and the disposal of the Suburb A property, all in 2020.
[84] Wife's Trial Affidavit, [16].
131 By reason of the breakdown of the relationship and the wife's inability to remain living in the former matrimonial home, now disposed of with the fruits of disposal retained by the husband, the Court finds that justice and equity requires consideration of the factors in Section 79(4) of the Act so that just and equitable orders can be made adjusting the marital parties' existing legal and equitable interests in property.[85]
Contributions: Section 79(4)(a), (b) and (c)
[85] Stanford v Stanford.
132 The Court makes the following findings in respect of the contributions which the husband and the wife made to property, within the meaning of Section 79(4)(a) and (b).
133 Before and during the relationship, the husband worked in Trade BB and the wife worked in Beauty Service Provider Z. Both marital parties worked hard at their respective jobs, however following the child's birth in April 2006, the wife did not return to the paid workforce until after separation. The wife states that the husband was opposed to her returning to work after the child was born.[86]
[86] Wife's Trial Affidavit, [114].
134 However, during the relationship, the wife did engage in some hairdressing at home for family and friends and used the funds received to supplement expenses for her son, in addition to child support she received from his father.
135 The husband acquired land, on which the former matrimonial home was later built, in May 1997. The evidence does not establish to the Court's satisfaction how the purchase was financed, but the Court accepts that the husband utilised some of his savings to do so. The husband refinanced the land by successive mortgages being registered and discharged on a number of occasions, including in June 1997, July 1998 and March 1999.[87] The wife did not contribute any of her property or financial resources to the purchase.
[87] Wife's First Updating Trial Affidavit, Annexure ''B'' (''Certificate of Title and details''), electronic page 21 of 27.
136 The husband constructed the former matrimonial home on the land over an extended period from early 2000 until September 2004.[88] The mortgage last registered over the title (before its sale in 2020) was registered in October 2009. The mortgage balance was $250,758 at 2 December 2013.[89]
[88] Trial Affidavit of the First Respondent husband sworn on 10 August 2018, [55] (''Husband's Trial Affidavit'').
[89] Wife's First Updating Trial Affidavit, [76].
137 When the marital parties commenced cohabitation in around October 2004, the wife owned a car, some chattels and had some cash at bank.
138 In September 2005, the husband was registered as the sole proprietor of the Suburb A property. The evidence does not establish to the Court's satisfaction how the purchase was financed, but the Court accepts that the husband was solely responsible for the purchase and the wife did not contribute any of her property and financial resources.
139 The husband was the principal income earner during the relationship and was primarily responsible for payment of household expenses, including school fees and expenses in respect of the child.
140 Following separation, the husband enjoyed the benefit of living in the former matrimonial home, until he sold the same in March 2020 in circumstances earlier described. After the sale of the former matrimonial home, the husband has lived rent-free in the home of his elderly widowed mother.
141 Since separation, the husband has progressed from reducing work to ceasing work in Trade BB. Conservation and improvement of the former matrimonial home and the Suburb A property ceased in 2020 when the husband disposed of them, in breach of Court orders, in circumstances earlier described.
142 The husband made greater contributions to property than the wife, from commencement of cohabitation until the date of trial.
143 The Court makes the following findings in respect of the contributions which the husband and the wife made to the welfare of the family, including in each party's capacity as a homemaker and parent, within the meaning of Section 79(4)(c) of the Act.
144 During the relationship, the wife was primarily responsible for the care of the child. The wife was responsible for cooking, cleaning, food shopping, taking the child to school and facilitating extracurricular activities. The wife also performed these functions for her son, Mr B, however this is not a relevant consideration under Section 79(4)(c) of the Act.[90]
[90] Robb and Robb (1995) FLC 92-555 (''Robb and Robb'').
145 Following separation, in early May 2016, the wife and the child moved out of the former matrimonial home and initially lived with the maternal grandparents until August 2016. Mr B went to live with his father until September 2016.
146 The wife significantly increased her employment commitments after separation, working at different times [in] Beauty Service Provider Z and also working at [School A] in the canteen during school terms doing cooking. The wife has been entitled to Commonwealth pensions, allowances and benefits since separation.
147 The wife was required to pay for rented accommodation for herself and the child from August 2016 until March or April 2024.[91] The child has been in the wife's exclusive care and has not spent time with the father since he was sentenced to an immediate 18-month term of imprisonment for contempt of Court in July 2020. From separation until the husband was incarcerated, the child lived on a week about basis with each parent.
[91] Third Updating Trial Affidavit of the Applicant wife affirmed on 17 January 2024, [57] (''Wife's Third Updating Trial Affidavit'').
148 The husband continued to pay for the child's private school fees at School A after separation, until the second half of 2019. The portion requiring payment is 25 percent of the normal fee level, due to the discount the wife is entitled to by being employed at the school. The child attended [School B] from the start of the 2020 school year.
149 The wife has made greater contributions to the welfare of the family, including as homemaker and parent, from commencement of cohabitation until the child turned 18 years of age on 3 April 2024.
Conclusion on contributions
150 Taking into account and balancing the disparate contributions of the marital parties to property and to the welfare of the family, from commencement of cohabitation until the date of trial, the Court finds that each party has made equal contributions pursuant to Section 79(4)(a), (b) and (c).
Adjustment factors: Section 79(4)(d) to (g)
151 The orders sought by the parties do not affect the earning capacity of the husband or the wife, pursuant to Section 79(4)(d). The considerations identified in Section 79(4)(f) and (g) are addressed in the following evaluation of Section 79(4)(e) which comprises the Section 75(2) factors, so far as they are relevant.
(a) the age and state of health of the [marital] parties [and the physical and mental capacity of each of them for gainful employment, identified in Section 75(2)(b)]
152 The wife is 52 years of age and turns 53 years of age in December this year. The husband turned 58 years of age in January this year. The wife is in good health.
153 The husband asserts that since his release from prison, he has been unable to work due to ''[his] physical and mental trauma of being in prison and not having any contact with [his] daughter''.[92] The husband asserts that he has tried to do some casual work but remains on [Government Benefit AA] benefits due to his physical and mental health.[93]
[92] Husband's Updating Trial Affidavit, [99].
[93] Ibid.
154 The Court accepts that the husband may be distressed at the loss of his relationship with the child, who is now 18 years of age. The Court does not accept the husband's uncorroborated evidence that he is unable to work due to his physical and mental health. The Court is satisfied that the husband is able to support himself adequately, and has been able to do so since separation, and is either understating the amount of work he is performing or is not exercising his existing earning capacity without reasonable excuse.
155 The Court makes these findings because:
1.The husband earned a taxable income of over $86,000 in the financial year ending 30 June 2015, the year before separation.
2.The husband most recently disclosed four invoices charged to a private company owned by his brother, Mr C, for [trade work] charged at $30 per hour. The total of the four invoices was $2,100 issued for work completed between November 2022 and January 2023.[94]
3.The husband adduces no current medical evidence from his treating practitioners about his state of health which explains why he is unable to work. The husband relies upon an unsworn statement from his general practitioner dated 25 June 2020. The statement refers to the husband having chronic lower back pain with bulging discs to lower lumbar spine since 1996.[95] The wife also gives evidence of the husband reporting back pain during the relationship.[96] The husband continued to manage his back pain and earned a reasonable income from 1996 until separation. There is no independent evidence that the husband's back condition has materially worsened since 2020.
4.The husband is motivated to present himself in the worst possible financial light to the Court, as part of his intention not to permit the wife to receive a just and equitable property settlement.
(b) the income, property and financial resources of each of the [marital] parties [and the physical and mental capacity of each of them for appropriate gainful employment; this aspect is discussed above with Section 75(2)(a)]
[94] Wife's Third Updating Trial Affidavit, Annexure ''D'' (''Copies of invoices disclosed by the First Respondent''), electronic pages 111 to 114 of 131.
[95] Husband's Updating Trial Affidavit, Annexure ''D'' (''To Whom It May Concern Letter from [Dr K] dated 25 June 2020''), electronic pages 33 to 34 of 37.
[96] Wife's Trial Affidavit, [228].
156 In her evidence in chief, the wife stated that she earns around $52,000 per annum working casually [at] Beauty Service Provider Z. The wife did not update her weekly expenses during her evidence in chief. In her financial statement filed in January 2024, the wife deposed to earning around $67,000 per annum on a full-time basis. Earlier in these reasons, the wife's property and notional property has been identified.
157 The husband's evidence is that he receives a Government Benefit AA payment of $345 per week.[97] Earlier in these reasons, the husband's property and notional property has been identified.
[97] Husband's Form 13 Financial Statement, Part D, electronic page 3 of 14.
158 The Court is satisfied that the husband has an earning capacity of around $50,000 per annum. The husband has enjoyed the benefit of living rent-free with his mother since April 2020, save for a period of 18 months when he was incarcerated. The husband was released from custody in early 2022 and continues to live with his mother.
(c) whether either [marital] party has the care or control of a child of the marriage who has not attained the age of 18 years
159 The child turned 18 years of age in April 2024.
(d) commitments of each of the [marital] parties that are necessary to enable the party to support: (i) himself or herself; and (ii) a child or another person that the party has a duty to maintain
160 The husband's evidence is that his Government Benefit AA income of $345 per week matches his weekly expenditure.[98] The Court is satisfied that the husband may supplement his weekly expenses from the cash that he retained from the disposal of the former matrimonial home and the Suburb A property.
[98] Husband's Form 13 Financial Statement, Part B, electronic page 2 of 14.
161 The wife currently deposes to a material surplus of expenses over income of around $1,900 per week.[99] No cross-examination was directed to this issue. However, on its face such a material surplus of expenses over income appears to be both unreasonable and unsustainable.
(f) the eligibility of either [marital] party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
[99] Wife's Form 13 Financial Statement, Part B, electronic page 2 of 14.
162 The husband receives Government Benefit AA payments. The wife is not currently receiving any Commonwealth benefits.
163 The wife has modest superannuation entitlements, set out earlier in these reasons. The husband asserts that he has NIL superannuation entitlements. The value of this entitlement has diminished from the value of $120,000, which the husband attributed in September 2016.[100]
(m) if either [marital] party is cohabiting with another person - the financial circumstances relating to the cohabitation
[100] Exhibit 6, Part J, electronic page 8 of 12.
164 The wife lives with her partner, [Mr L], in a home which has been built since a block of land was purchased in their joint names in 2020. The wife contributed $22,000 towards the purchase, and Mr L contributed $120,000 towards the purchase. The wife and Mr L share household expenses equally.[101]
[101] Transcript of the examination-in-chief of the Applicant wife (18 September 2024) 60 line 40 to 61 line 30 (''Transcript, Wife, 18 September 2024'').
165 According to the husband, he has not re-partnered.
(n) the terms of any order made or proposed to be made under Section 79 in relation to: (i) the property of the [marital] parties
166 Based upon the contributions-based entitlements of each party, and subject to any adjustment to those entitlements, the asset pool must be divided equally.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
167 Until the child turned 18 years of age in April 2024, the husband paid child support on a sporadic basis. Since separation, the husband has reported a progressively decreasing taxable income and, on at least two occasions, provided significantly lower estimates of his income to the Child Support Agency, after assessments were issued based upon a higher income.
168 The husband made contributions to payment of the child's school fees, as earlier described.
169 Earlier in 2024, the husband was assessed to pay the wife $41 per month by way of child support.[102]
(o) any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account
[102] Wife's Third Updating Trial Affidavit, [60].
170 There are four matters which invite discussion pursuant to this consideration.
The husband's non-disclosure
171 The husband's lack of full, frank and timely disclosure throughout these proceedings has enabled the Court to earlier make robust findings about the extent of his current and notional property interests.
172 The husband is not entitled to obtain a forensic advantage or otherwise benefit in these proceedings by withholding documents and information which he is under an obligation to disclose.
The wife's receipt of the $100,000 settlement sum
173 Pursuant to a Deed of Settlement and Release dated 17 August 2021 between the husband, the wife and the husband's brother, Mr C, the marital parties agreed that the husband purged five counts of contempt of the Orders made on 24 May 2016 (one breach), 21 March 2017 (three breaches) and 28 May 2019 (one breach) upon Mr C paying the sum of $100,000 to the trust account of the wife's solicitors. [103]
[103] Wife's Second Updating Trial Affidavit, [128] and Annexure ''T'' (''Deed of Settlement and Release''), electronic pages 103 to 108 of 108.
174 The wife filed this contempt application on 20 October 2020, and the husband pleaded guilty to all five counts of contempt on 4 March 2021. The marital parties agreed that the wife was entitled to apply the proceeds as she deemed appropriate, and such funds were not to be characterised in these proceedings.[104]
[104] Ibid.
175 The wife was paid the sum of $100,000 in September 2021. The marital parties agreed that the husband could transfer his [Motor Vehicle A] to Mr C.[105]
[105] Ibid.
176 The marital parties agreed that the sum was not to be characterised in these proceedings, however the Court does take into account that the wife has received this capital sum. The wife has not given any specific evidence as to how she has disposed of these funds.
Outstanding family law legal fees and other liabilities of the husband and the wife
177 The Court takes into account that each party has outstanding family law legal fees.[106] In the case of the wife, the Court has earlier recounted the circumstances in which the wife's solicitors would seek to recover outstanding costs from the wife.[107]
[106] Hurst v Weber (2009) 233 FLR 337 at 348 [34] and 349 [47].
[107] See paragraph [122] of these reasons.
178 In the case of the husband, in light of the Court's earlier finding that the husband has retained the capacity to support himself since separation, the family law legal fees to Law Firm A were able to be discharged from funds retained by the husband at separation.
179 The Court has earlier identified relevant aspects of the other unsecured liabilities asserted by each party, which the Court declined to include as liabilities in the proceedings. The Court is not satisfied that any significant weight should be attached to those liabilities.
The husband looked after and treated the wife's son as his own son
180 The husband should be given credit for financially contributing to the welfare of the wife's son, Mr B, as well as de facto parenting contributions, during the relationship.[108]
Conclusion on adjustment factors
[108] Robb and Robb.
181 The Court takes into account and weighs up the considerations just discussed. In all the circumstances, the Court does not consider that justice and equity requires any adjustment to be made to the contributions-based entitlements of the marital parties.
Just and equitable orders - form and content: Section 79(2)
182 The Court is satisfied that orders should be made dividing the marital parties' notional and actual asset pool equally.
183 Earlier in these reasons, the Court found that the total property, notional property and superannuation interests retained by the marital parties is worth $876,190. Orders must be made for each party to retain $438,095. The wife currently retains a total of $80,727, comprising existing legal and equitable interests in property worth $50,727, and notional property in the sum of $30,000. The husband must pay the wife the sum of $357,368 for the wife to receive her entitlement.
184 The husband currently retains a total of $795,463, comprising notional property in the sum of $385,650 and existing legal and equitable interests in property worth $409,813. After paying the wife the sum of $357,368, the husband will retain around $43,000 in cash, comprising the balance of the proceeds of sale of the former matrimonial home and the funds drawn from the mortgage redraw after separation, together with his other existing property.
185 The Court considers that such an outcome is just and equitable in all the circumstances.
186 The Court declines to make any order against Mr Gallo. The wife's entitlement can be met from property in the possession or control of the husband.
Orders
187 For these reasons, there will be the following orders, subject to hearing from the parties as to form:
1.Within 30 days of the date of these orders, the First Respondent, [MR FOUST], must pay to the Applicant, [MS MOLLOY], the sum of $357,368.
2.The First Respondent do indemnify and keep the Applicant indemnified in relation to all liabilities of the Foust Family Trust, including but not limited to any beneficiary loan accounts in which a debit balance is recorded in the name of the Applicant.
3.The Applicant's application against the Fourth Respondent, [MR GALLO], is dismissed.
4.Each party otherwise retain the property, liabilities and superannuation entitlements in that party’s possession, custody or control.
5.The parties have liberty to apply in relation to the implementation of these orders.
6.The parties have liberty to provide a copy of these orders to any bank, insurance broker, settlement agent, mortgage broker or other third party necessary to give effect to these orders.
7.The parties forthwith do all acts and sign all documents and give all consent necessary to give force and effect to these orders.
8.All documents produced by named persons pursuant to subpoena be returned or destroyed in accordance with the request from the named person upon the expiration of 42 days from this order.
9.In relation to material tendered as an exhibit into evidence in these proceedings:
(a)all parties must collect their exhibits tendered by them (''their exhibits'') from the Chambers of the Honourable Justice Berry at least 42 days, and no later than 56 days, from the date of this order;
(b)all parties must contact the Chambers of the Honourable Justice Berry to arrange the collection of their exhibits; and
(c)in default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the Court without notice to the parties.
10.All material tendered as an exhibit and uploaded electronically by the Court will be destroyed by the Court without notice to the parties on the expiration of 42 days from this order.
11.In the event of an appeal being lodged prior to the expiration of 42 days from this order, paragraphs 8, 9 and 10 above do not apply.
12.Any application for costs (including costs reserved) must be consolidated in a Form 2 Application with a supporting affidavit and filed and served within 28 days of this order.
13.Subject to the preceding orders, the Form 1 Initiating Application filed by the Applicant on 18 May 2016 as amended on 10 February 2021 and the Form 1A Response filed by the First Respondent on 2 September 2016 as amended on 8 February 2017, and all outstanding interim proceedings, be otherwise dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
JW
Associate
17 OCTOBER 2024
0
14
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